Stock Market Predictions 2023: 4 Stocks to Watch in 2023
2022 has not been an easy year for stock market. The SP500 has posted 16.8% loss year to date while investment in gold has resulted in 3.2% loss (measured via SPDR Gold Shares return year to date) compared with a 14.3% loss for investments in 7-10 year. Treasury bonds (measured via iShares Trust - iShares 7-10 Year Treasury Bond ETF YTD return with the assumption of reinvestments of any dividends on ex-date). Stock market outlook 2023 is no less cloudy with the Federal Reserve signaling continuing rate hikes in 2023.
Let us look at four big cap US stocks and see if we can make a 2023 stock market prediction for them, and perhaps find opportunities for those who plan to learn what is the forex market and how does it work in 2023.
1. Tesla - NASDAQ: TSLA
Tesla is a global leader in electric car manufacturing. Besides fundamentals such as electric vehicle demand and global material supply bottlenecks, varying involvement of company’s Chief Executive Officer Elon Musk in other enterprise also is a major driver Tesla stock price due to enormous popularity of Elon Musk.
Perfect Tesla stock prediction 2023 should therefore include also prediction of Musk’s involvement in at least two other major enterprise of Musk – SpaceX and Twitter.
In the four weeks since Musk took over Twitter in October 27, Tesla stock lost over 18%. Musk has said that he will appoint someone to take his place at the head of Twitter, without specifying any datelines.
As to SpaceX, Musk might have to spend more efforts on making more money on his space exploration and satellite communications enterprise while trying to pay for acquisition of Twitter.
Let us use chart analysis of weekly Tesla stock price presented below for Tesla stock prediction 2023.
Chart 1: Weekly TSLA candle chart
The TSLA weekly chart technical analysis reveals Tesla price is in retreat after hitting all-time high over one year ago in the end of October of 2021. There was one unsuccessful attempt for downtrend reversal since then – in January of 2022.
The Gann indicator gives another confirmation of downward Tesla price momentum. The Gann fan indicator shows Tesla price is retreating currently after testing the main downward 45 degree Gann aqua color line from below in March-April. The failure by Tesla price to rise above that line is a clear indication that Tesla price is in downtrend.
However, the Relative Strength Indicator is in Oversold zone currently. And the MACD indicator is giving a second bullish signal. It is most likely the price will rebound above the long term support and remain in the lower quarter of the trading range since June 2022, in the aqua rectangle. Tesla stock prediction 2023 is $228-$252.
2. Apple - NASDAQ: AAPL
Apple is a universally favored tech stock.
In its recent report Apple's free cash flow came in at $20.8 billion, reflecting a 22.7% over year growth.
While enjoying a strong iPhone demand from loyal customer base, the company’s iPhone supply is presently experiencing a major negative impact due to China’s COVID lockdowns.
In case the COVID restrictions are lifted in China, Apple will enjoy a revenue growth due to deferred purchases by loyal customers who weren’t able to get new phones due to supply shortage.
We can conduct chart analysis of weekly Apple stock price presented below for Apple stock prediction 2023.
Chart 2: Weekly AAPL candle chart
The AAPL weekly chart technical analysis shows Apple price is in retreat after testing resistance fourteen weeks ago.
The price was rebounding since August 2018. However the trend reversed after AAPL:Weekly reflected off the resistance in April 2022. It has fallen below support line and the Gann fan indicator shows AAPL:Weekly has broken out below the 2x1 time/price line and will probably trade in that breakout direction until the next Gann angle.
It is most likely the price will remain below the resistance line in the aqua rectangle. Apple stock prediction 2023 is $146 - $151.
3. NVIDIA - NASDAQ: NVDA
NVIDIA reported in its latest quarterly results that “year over year growth was driven primarily by leading US cloud providers and broadening set of consumer internet companies for workloads such as large language models, recommendation systems and generative AI.” Record data and automotive revenue was earned, while gaming and pro visualization platforms declined.
While automotive sector revenue is expected to grow, prospects for gaming sector is not bright as the demand for mining equipment is not likely to recover while crypto currencies prices are in free fall.
The company specified that sanctions on China-related chip sales negatively impact its current and future revenue streams.
Against this background, NVIDIA's stock has gained 25% over the past month. Company’s Return on Equity (ROE), which measures how much profit the company generates for every $1 worth of shareholders' equity, is 28%:
ROE = Net Profit (from continuing operations) ÷ Shareholders' Equity = $6.0Billion ÷ $21Billion (Based on the trailing twelve months to October 2022) = 0.28.
For comparison, the average ROE reported by the industry is 19%.
At the same time, NVIDIA is expensive relative to its peers – company’s P/E ratio (Price to Earnings) of 65.4 is considerably higher than the average P/E of 25.4 for its peers: Advanced Micro Devices, Broadcom, Texas Instruments and QUALCOMM with P/Es of 51.9, 21.5, 17.7 and 10.3 respectively.
Let us conduct a chart analysis of weekly NVIDIA stock price presented below for NVIDIA stock prediction 2023.
Chart 3: Weekly NVDIA candle chart
The NVDIA weekly chart technical analysis shows NVIDIA stock price is in retreat after hitting all time high in November 2021 – same time as crypto market capitalization.
The price was rebounding since June 2019. However the trend reversed after NVDA:Weekly reflected off the Gann 1x1 line in November 2021. It has broken out below the 2x1 time/price line and is testing 61.8 level support around $159 of Fibonacci expansion charts (in yellow).
Most likely the price will trade in that breakout direction until the next Gann angle, which it will likely break out too. The price is expected to reach the aqua rectangle above the Fibonacci 161.8 level after breaching below the Fibonacci 100. NVIDIA stock forecast 2023 is $106 - $120.
4. Amazon - NASDAQ: AMZN
Amazon is a global e-commerce company. Its market value rose to more than $1.8 trillion in 2021. However, the stock is heading for a 44% decline this year. Amazon reported almost a 50% drop in operating income year over year in the third quarter while the free cash flow shifted to an outflow over the trailing 12-month period.
However, the company is a leader in cloud computing business. Known as the Amazon Web Services, or AWS, it made up more than 70% of Amazon's total operating income last year. And AWS' operating margin averages about 30% each quarter.
Let us study the weekly Amazon stock price presented below for Amazon stock price prediction 2023.
Chart 4: Weekly AMZN candle chart
The AMZN weekly chart technical analysis shows Amazon stock price is in retreat after hitting all time high in July 2021.
A long term bullish trend started in early 2015 with the price testing the green support line multiple times. However the bullish trend reversed after AMZN: Weekly broke out below the 2x1 Gann time/price line early January this year. It then breached below the support and then broke out below the 3x1 Gann time/price line, subsequently rebounding off the 23.6 level support at $84.5 of Fibonacci extension indicator (in yellow).
Most likely the price will trade in that breakout direction until reaching the aqua rectangle above the Fibonacci 38.2 level. Amazon stock price prediction 2023 is $74.5 - $77.9.
Conclusion
Our study suggests two out of four stocks – NVIDIA and Amazon - are likely to continue declining while Apple and Tesla will continue trading in roughly the same range.